On a balmy September evening in 1992 I remember thinking I was witnessing a political earthquake when I stood a few feet from Norman Lamont as he announced that Britain would be pulling out of the ERM, writes Nicholas Watt.

Nobody could have known that nearly two decades later Black Wednesday would still cast a shadow over British politics - and the two men vying to become prime minister at the next election.

As he walked into the Treasury courtyard, the chancellor was followed by a bright young pup who was profoundly shaken by Britain's tumultuous exit from the ERM.

David Cameron, who was Lord Lamont's special adviser, was already highly Eurosceptic before Black Wednesday.

But the sight of Britain losing control of its economic policy - just two years after entering the European exchange rate mechanism - seared in his mind a profound mistrust of the entire European project.

This explains why Mr Cameron thought nothing during last year's Tory leadership contest of agreeing to pull Conservative MEPs out of the federalist EPP-ED grouping in the European parliament, even though this is now giving him a headache.

But Mr Cameron is not the only politician who is still deeply shaken by Black Wednesday.

Gordon Brown had recently been appointed shadow chancellor and he led the assault, along with the new Labour leader, John Smith, against the Conservatives for their "colossal" errors of judgment.

Mr Brown was hampered because he had campaigned strongly in favour of British entry to the ERM when he was shadow trade and industry secretary. Like Mr Cameron, Mr Brown is instinctively wary of European integration, which helps explain his caution over British membership of the euro and his distaste for EU meetings.

Britain's two main parties are therefore likely to be led at the next election by two men who have never quite recovered from Black Wednesday and who distrust the EU.

Mr Brown hopes that his approach, which he describes as "European realism", will reflect the instincts of the British people who have never warmed to the EU, but who adopt a pragmatic view.

Mr Cameron is, on the other hand, finding that any attempt to change working arrangements in Brussels can produce a headache.

At a weak moment in last year's Tory election contest Mr Cameron shored up his base on the right of the party by pledging to pull the Tories out of the EPP-ED grouping in the European parliament.

Mr Cameron thought he had a sensible and honourable position because he spoke in practical and unemotional language about "doing as we say" -- and not sitting with people Tories disagree with.

This contrasts with the ridiculous language of adopted by William Hague as Tory leader when he spoke about giving people back their country.

Since making his pledge, Mr Cameron has found that breaking away from the EPP-ED will be difficult.

This point is made in today's Financial Times by Phil Stephens and in the Daily Telegraph by Rachel Sylvester, who reports that the EPP-ED is the one issue which makes the silky smooth Cameron lose his cool.

There are two broad problems which explain why Mr Hague, who has been tasked with negotiating the divorce, is moving at a snail's pace.

First, the Tories will have to sit with what Ken Clarke describes as "headbangers" if they want to avoid sitting as a non-aligned group at the back of the parliament next to neo-fascists.

Under the rules of the parliament, groupings have to include MEPs from at least five countries. This means that the Tories will have to sit with Poland's governing Law and Justice party, whose leaders believe that gay people are deviants.

This does not seem to bother Eurosceptics, who regard Law and Justice as a mainstream European centre right party, a point made today on the Conservativehome blog by Neil O'Brien, the director of Open Europe.

But Mr Cameron may face charges of doing one thing in Brussels and another thing back home after he recently underlined his modernising credentials by ostentatiously attending the seminal gay film, Brokeback Mountain.

The second danger in withdrawing from the EPP-ED is that the Tories will cut themselves off from the main centre-right grouping in the EU.

Angela Merkel, the new German chancellor, and Nicolas Sarkozy, the frontrunner in next year's French presidential election, have both tried to persuade Mr Cameron to change his mind.

But he appears unmoved and will once again miss this week's regular EPP-ED shindig with Merkel and Sarkozy, according to today's Daily Telegraph.

Many commentators, including the Guardian's own Peter Preston, are forecasting a revival of the Tory civil war on Europe. This is over-stated, because Mr Cameron is careful to talk in measured and calm tones about Europe.

If anything Mr Cameron is in danger of commiting a far graver offence of reducing British influence on the centre-right across Europe and in the European parliament - which votes on 60% of all European legislation.

Eurosceptics will find it hard to claim that Brussels is an evil plot against Britain while removing Britain's largest party in the parliament from the most important grouping.